Cost Price & Profit
Working with a Cost Price and a Markup or Margin percentage in your quotes helps you understand exactly how much you’re making on each item – and across the whole quote.
When editing a Price Item, you can select ‘Cost Price & Profit’ from the “more” menu (three dots icon) to enable the Cost Price field. This lets you enter a Cost Price for that item which will automatically calculate the Unit Price.
Calculation Method
In Account Settings → Quote Defaults, you can choose how profit is calculated:
- Markup (the default for new accounts)
- Margin
You can also:
- Switch between calculation methods at any time.
- Set a default percentage for Markup or Margin.
- Choose to always include the Cost Price field.
Markup vs Margin – What’s the Difference?
Both methods show profit – just from different perspectives.
- Markup shows how much you add on top of your cost.
- Margin shows how much of the final price is profit.
| Example | Cost | Sell Price | Profit | % Calculation | Result |
|---|---|---|---|---|---|
| Markup | $100 | $125 | $25 | Profit ÷ Cost | 25% Markup |
| Margin | $100 | $125 | $25 | Profit ÷ Sell Price | 20% Margin |
In both cases, you make $25 profit, but the percentage changes depending on which way you look at it. Markup is more common when setting prices. Margin is more useful when analysing overall profitability.
Choosing Which to Use
- Markup is straightforward – “I want to make 25% on top of my cost.”
- Margin is helpful if you prefer to track profitability by how much of your sale price is profit.
If you’re unsure, stick with Markup – it’s the default for new accounts and works well for most businesses.